The Zimbabwean administration of President Emerson Mnangagwa, which has been facing unrest amid rapidly rising inflation, has hiked civil servants' salaries in local currency by 50% and also awarded them a US$75 Covid-19 allowance starting this month.
Finance Minister Mthuli Ncube, who has faced mounting pressure to float the fixed exchange rate, said on Wednesday: "Zimbabwe civil servants salaries adjusted by 50% with immediate effect.
In addition, a non-taxable Covid-19 allowance of US$75 per month [will be implemented] for civil servants whilst pensioners will get US$30 per month.”
The US dollar allowances will be paid for three months, while the civil servants have now been asked to open Foreign Currency Accounts with local finance institutions.
The introduction of the US dollar allowances for the Zimbabwean civil service could reduce demand for Zimbabwe’s new local bank notes.
